Plan for young smart bank customers – 100,000 € savings in life or more!

Open account for 14 to 17 years old … and why you ► absolutely must ◄ help your child!

19.10.2016

Besides the Volksbank and savings banks, it is sometimes a little difficult to open a true current account for a teenager. Especially, if it is at one of the best direct banks in Germany.

In this article, you learn about a strategy on how to help your child getting the best possible start into the financial life and with this, save Euros 100,000 or more in his/her life!

1. The challenge

Up to the 18th birthday, one does not yet have the complete legal capacity and cannot open a bank account by oneself. The consent of the parents by signature is necessary. § 106ff Civil Code.

2. Solution variant “Wait” (with its difficulties)

Wait until the 18th birthday. Then, one has the complete legal capacity in Germany and can apply for a current account at a bank by oneself.

2.1 Frequent problem

None or only a very low income is available. Often at the creditworthiness check, no good score is shown, as one did not have the time to build it.

The low income and the lacking “Credit History” cause again and again rejections of applications on account opening at Germany’s free and, in the first line, great direct banks, like the DKB.

2.2. Often chosen, but intermediate solutions

Opening of a credit account at a less attractive bank.

The way through a less attractive bank can become quite expensive in the end – as you can learn from the story of Monika

Real-life story:Monika (19) is rejected by the DKB!

Monika, the older daughter of a real estate agent and a teacher plans to go to Australia doing Work-and-Travel after her A-levels for one year. She has heard from friends and often read in the internet that the best option for a credit card, which she really needs, is the DKB Visa Card.

The DKB Visa Card is completely free of charge. One does not even pay for withdrawing cash abroad. Moreover – and, which is very important for her –, there is help in emergencies. Within 48 hours, Monika can get an emergency card and afterwards a replacement card abroad.

This is very important for her, as she will stay abroad for a long time and knows already that most other banks do not offer such a service.

For financing her journey, she got a temporary job in the city for 6 months and moved to a cheap residencial community nearby in the outskirts. Her grandmother is pleased with her initiative, which was why she has promised to bear her rent in the amount of Euros 250 per month. Monika received the money in cash always during a visit on the first Sunday of the month.

She states all her data truthfully in the online application:

Euros 450 income

Living and rent

(new) employer

… and she is looking forward to her DKB Visa Card in the sofisticated black world-map design. She will pay the cocktails with it on the warm beach of the Gold Coast south of Brisbane …

Unfortunately, she receives an automated e-mail shortly after the online application stating that an account opening is currently not possible due to the policy of the bank.

Account opening was rejected – why?

How come? After an intense internet research, Monika finds out that many things have gone wrong without knowing, which consequently led to a rejection of the account opening.

What went wront? Find the key points here:

too low income

Whoever applies for an account with a credit card (excluding prepaid-providers, such as PayCenter), must have a regular income in a sufficient amount.

Monthly Euros 450 are acceptable for students, but it is very low in a normal employee relationship. After finishing school, Monika will have the professional status of an “employee” with her temporary job.

Moreover, she has not stated the “income” of Euros 250 from her grandmother. If she is still entitled to child support, then this is also added to the sum of income.

Whether income is paid by transfer or in cash, does not matter. However, it has to be paid regularly and, if requested, must be proofable.

Move into a “bad” neighbourhood

As in many other countries, the address also affects the creditworthiness in Germany. If one moves to a very cheap neighbourhood, just like Monika, possible into a residential community in a big building, where payment omissions happened frequently, it is bad for the own creditworthiness.

Also the duration of the existing work relationship affects the creditworthiness. Of course, the banks knows that one cannot expect a long time for young people.

Due to these findings, Monika speaks with her parents and recommends to open an account for her 17 years old sister before her 18th birthday according to the plan for “young and smart bank customers” (see following section).

3. Plan for young and smart bank customers

In this plan, the creditworthiness of the parents is used to make the opening of a free bank account at one of the best German direct banks possible for the children. With this, parents create an outstanding starts in the world of banks for their children (without worsening the own creditworthiness!).

3.1 Crucial advantage:

The DKB opens the free current account for teenagers up to the 18th birthday without creditworthiness check and without proof of income and issues the DKB Visa Card immediately on the name of the child!

However, the application on account opening cannot be made by the teenager, but the account is opened directly in the online banking of the parents.

How this works, one can see in the following two pictures:

One can get to this point of the menu as a customer after the log-in (DKB-online banking).

Pre-filled online application:

The DKB has already taken and filled all known data for the junior account. It is recommended to change the selection at “Girocard” to “Ja” (yes) (see green arrow). 3.2 DKB-account for parents:

free account management including all entries

free cash withdrawals through the Visa Card at ATMs or Smartphone/supermarkets

“Apply now for the DKB-account”

3.3 DKB-account for teenagers

The same as for parents (see above) only with the difference that no credit line is possible. The account is only managed with balance. Transfers to the credit card increase the credit limit. If the money is used up, no further expenditures can be made. One cannot go into debt (important security feature!).

own access from the 14th birthday to the online banking.

3.4 What happens at the 18th birthday?

Shortly before the 18th birthday, the DKB contacts the teenager and discusses, how the account is assumed in the independence.

For example, from the 18th birthday, an overdraft facility can be set up, if there is own income (e.g. training allowance). One can also reject this offer, if one prefers to hold the account only within the balance area out of security reasons.

Complete takeover of the account with the 18th birthday!

With the 18th birthday, the online access of the parents to the account is deactivated. Beforehand, the parents could access the account through online banking and, if necessary, check how the child is dealing with his/her finances. This is not possible after the 18th birthday.

Let’s get back to Monika and her family

Monika’s father was not yet a customer of the DKB, but he accepted to open an account due to the difficult situation of the older daughter. That way, this can be avoided for the younger daughter.

Marie, who will soon go on a school trip to Italy, is looking forward to her own Visa Card and to use it for booking services and the fee-free withdrawal of cash.

For other things, she puts it away, as the Girocard is enough for paying at the supermarket. A credit card is not yet necessary for her everyday life.

As soon as she is 18, she will take over the account completely and she will become customer at one of Germany’s best direct banks without further checks.

The information at the Schufa that Marie is a DKB customer and has a credit card with only 18 years, can be a good start for building an own creditworthiness!

Incidently, the father has deposited his DKB credit card at amazon and enjoys two-way:

up to 30 days interest-free (unitl the automatic settlement of the credit card with the current account)

accumulating points in the DKB-Club (can be redeemed for bonuses).

Moreover, he wants to test it extensively on his next holiday trip.

And what happened to Monika?

Monika found out in the internal area of our special portal that there is the “trick” with the community account. If the creditworthiness of one person is not sufficient, then one can add a second person to the account opening.

She has opened a community account together with her mother. Her mother was entered as the first account holder. According to experience, the first account holder is checked stricter and the second one is virtually a supplement.

An alternative would have been entering her as an “authorized person” of her father’s account. Therefore, Monika would also have received a credit card. But that would not have helped her in her future life, as she would not have been an account holder.

In the solution with the community account with her mother, she can lateron apply for a single account at the DKB without being checked again (and then cancel the community account), through which she will be an “independent DKB-customer”.

Modern and free current account with Visa Card, app and future!

4. Set the course for life now(the following paragraphs are the most important ones!)

Did you notice all the small valuable details in Monika’s story? One can learn how to take advantage of the creditworthiness of other people in order to become a DKB-customer, even after a rejection on account opening!

I personally assume that the conscienceness for the own creditworthiness rating will rise in the coming years and that (young) people will start to plan their creditworthiness!

Management of creditworthiness will become hugely important!

It is very important, when one has started to have an own family, perhaps at the age of 30, and wants to finance the own home. With an average creditworthiness, one often gets double the loan interest than a person with a very good creditworthiness!

That means: who misses to build the creditworthiness in young years, will have to pay additionally Euros 100,000 or more at real estate financing in the later years!

Do you want that (being parents)?

One can avoid that by helping the children to become customers at one of the best German direct banks! This is very advantageous for the creditworthiness.

At the Schufa (all current accounts at banks in Germany are reported there), it is good to have the entry of the DKB. The DKB is namely known for the fact that it values a good creditworthiness at account opening!

Less favourable are banks, where it is particularly easy to become a customer or that generally have a bad reputation. In my Schufa-entries, I personally do not want to have entries of the Targobank, Santander or Norisbank. :-O

Also a journey from one bank to another is often not beneficial for the creditworthiness rating at the Schufa.

The creditworthiness is built step by step

At best, one chooses one of the best banks right away and looks for possibilities to be accepted. Lateron, one can add further (few) accounts and cards. One is even in a better situation, if one is customer at two or three financial institutions.

However, do not implement all of this on your 18th birthday. If one still has the old savings account at the Schufa being 18, then a current account at a bank with intermediate reputation opened since short and applying additionally for the DKB-account, because of the great conditions of the DKB-credit card, then this could also be a reason for rejection.

The bank is afraid that the account will only be used infrequently or only for the fee-free withdrawing of cash. Unfortunately, the statistics prove that this is true.

A free bank that even assumes the fees for cash withdrawals, of course, must earn money with the product. Otherwise, it could not survive for long. The DKB offers its free DKB-account since more than 15 years in this form. It earns through the use of the card for cashless payments and when one uses the overdraft facility (loan interest). Lateron, perhaps through financing (car purchase, house purchase).

That means: if you have become a customer of the DKB, then please use the account meaningfully, so it will sustain for us all for a long time.

Use this knowledge and help spreading the word!

5. Proclamation

For teenagers:

Show this article to your parents (perhaps send the link via e-mail or Facebook?) and ask them to help you with the DKB-account opening.

In order to have a very good start into the world of banks, which might save you Euros 100,000 or more (think of the example with the expensive home financing at an intermediate creditworthiness – this also applies to other loans, such as car purchase, etc.).

For parents:

Support and accompany your children when tapping into the financial world.

Open the “DKB Cash u18“ for your children, which is assumed by the children without another check on their 18th birthday.

With this, you enable your children to have the best-possible start without making your own creditworthiness suffer! You are welcome to subscribe to get further advices.

Questions? Experiences?

For young, as well as “elderly” smart bank customers, the comments feature is activated for questions and exchange. Feel free to take extensive advantage of it and work on building your creditworthiness. The invested efford here will pay off 1,000 times or more! Many thanks. 🙂

Open account for 14 to 17 years old … and why you ► absolutely must ◄ help your child!, 5.0 out of 5 based on 2 ratings

Who writes here?

Someone who gained experience with more than 100 banks in more than 20 countries during the past 15 years. My name is Gregor and if you click to continue you can find out why I am here and what this site is for ⇒ continue.